McDonald's Sounds Alarm On US Consumer Spending

Core Viewpoint - McDonald's Corp. is experiencing a decline in U.S. consumer spending, particularly among lower-income customers, due to rising costs of necessities, which has led to a decrease in restaurant traffic from this demographic [1][2][5]. Group 1: Consumer Spending Trends - CEO Chris Kempczinski indicated that restaurant traffic from low-income diners has been declining at a nearly double-digit rate for almost two years [2][3]. - The decline in spending highlights the impact of inflation and high living costs on households with limited disposable income, forcing them to cut back on even affordable fast-food options [4][5]. Group 2: Company Strategies - To counteract the slowdown in consumer spending, McDonald's has implemented menu promotions and value offerings, such as the return of Snack Wraps and Extra Value Meals, aimed at attracting budget-conscious diners [4][5]. - The company believes that value is important across all income levels, not just for low-income consumers, as everyone seeks good value for their money [5]. Group 3: Economic Outlook - McDonald's anticipates that the challenging consumer environment and financial pressures on consumers will persist well into 2026, citing high costs of housing, childcare, and food as significant factors [5][6]. - The company is balancing the need for affordability with profitability as it navigates the broader consumer weakness and spending power divide across the U.S. [6].